There is a difference between planning and planning well.
You have a job.
Maybe you love it.
Maybe you do not.
Either way, you will eventually want to retire.
To do so, you will need to prepare.
According to a recent Kiplinger article titled “4 Actions to Take If You’re Retiring in 2017,” there are a few things you cannot overlook.
What are they?
Does your employer offer profit sharing contribution or a match for your retirement plan or 401(k)?
You should contribute at least the maximum match amount.
You should also maximize your contribution percentage early on.
Some business will put a cap on how much can be contributed.
Putting aside money early and often is key.
Not sure what the terms of your employee 401(k) plan are?
Reach out to your Human Resources Manager for details.
Know your risk profile.
Your money flow will shift when you retire.
You will no longer be saving for your golden years.
You will be living in them.
These changes should be reflected in your portfolio.
In what way?
You will want to adjust your portfolio.
You should decrease the amount of high risk assets like stocks.
You will want to maintain what you have rather than lose a significant amount should there be a market downturn.
In short, you simply do not have time to make back any loses.
Pay the proper amount in taxes.
When you work, taxes are often withheld.
This is not the case in retirement.
You will still owe taxes.
You can opt in to having taxes withheld from pension benefits, Social Security benefits, and 401(k) or IRA distributions.
If these are not withheld, you should still calculate and pay what is owed.
Yes, the tax man still cometh.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Kiplinger (May 2017) “4 Actions to Take If You’re Retiring in 2017”